Changing times

Companies meet demand for aftermarket products, services

Posted on Jul 14, 2020 :: Back Office Operations
Posted by , Insight on Manufacturing Staff Writer

During the last few months of the coronavirus pandemic, many companies have had to adapt to changes, including how they meet demand for current or new products and how they implement new procedures to keep workers safe and healthy.

And there’s at least one area in which some manufacturers are seeing sustained demand or even growth: aftermarket products and services.

Conger Toyota-Lift, which provides sales and rental of forklifts as well as parts and service, saw overall demand slow a bit in April, though now business is back to pre-pandemic levels, says Jeremiah Reffke, director of aftermarket.

But in one area — rentals — demand stayed “extremely strong through the whole pandemic,” he says. “That is an area that held strong and never skipped a beat through the whole COVID process.”

Seeing that demand stay steady was somewhat unexpected, as rental demand is often a bellwether of how industry is faring overall, he says. “When we start seeing rentals returned, it’s an indicator of how the economy is doing.”

Conger Toyota-Lift has developed new policies to keep customers and workers safe, including disinfecting equipment whether it’s coming in for repair or going out for delivery.

“I think it’s a good adaptation, and our customers really seem to appreciate when they see our technicians taking that extra precaution to make sure that they’re sanitizing and trying to do our part in keeping everything safe,” Reffke says.

Elizabeth Wilson, aftermarket spares and customer service manager for Fabio Perini, which engineers, designs and manufactures tissue converting equipment, says the international company saw the pandemic starting to affect its offices in China and Italy months before it reached the United States.

“We were already preparing for this moment and going, ‘There’s a good chance it’s coming our way,’” says Wilson, who is in charge of supporting spare parts in Latin America, North America and Canada.

Fabio Perini responded to the demand by bulking up inventory and purchasing consumable products and hard-to-get parts, Wilson says. The benefit of being a global company was that Wilson was able to source parts from other countries if they weren’t available here.

“We probably had an additional half a million dollars sitting in our inventory, which is on top of our already $4 million inventory that we store just in Green Bay to support our customers,” Wilson says. “We were preparing as we saw our other colleagues in the middle of it.”

They weren’t the only ones preparing. As early as Jan. 1, Fabio Perini saw sales increase, with manufacturers preparing for and responding to demand from end customers like Costco and Sam’s Club-type companies, she says.

“There was a lot of pressure, more of a fear of the unknown,” Wilson says. “Our customers were calling us on a very regular basis, going, ‘What do you know today? Where do you see a gap?’ And we were keeping a very close eye on our supply chain, their supply chain, our supply chain. Everybody watching what was happening throughout the entire world.”

Even transportation was not a problem — at first — because nonessential products weren’t being moved across the ocean. “The Gucci purses weren’t coming from there. Louis Vuitton was not coming from Italy. I had more room on my planes,” Wilson says. But as the economy has begun to open back up, there has been a bit more pressure on carrier space.

The way the company provided service to clients also changed as customer companies adopted policies about people entering. Some didn’t allow technicians who used air travel to enter their facilities.

“So now you have an employee that can only go to one location. … We had technicians driving all over the country for 12-, 18-hour drives,” Wilson says. “Our president went out driving. It was really different.”

For those technicians who couldn’t travel elsewhere, the company had them performing work at Fabio Perini, even landscaping and yard cleanup, Wilson says.

“We, at the company, wanted to make sure that we didn’t have to lay off anybody. And we had a big conversation about making sure that we’re all going to support each other as a family.”

The pandemic also meant the company needed to change the way it communicated, ensuring that those essential workers still had access to the people they needed. Fabio Perini jumped into using Zoom meetings and the business communication platform Slack to keep in touch.

“It’s tough to manage when not everybody in your team can work from home,” Wilson says. For example, it was important to make sure the essential workers didn’t get the feeling everyone else was home lounging on their deck. “They have to know that these people are working, so the communication back and forth still is critical.”

Going forward, Fabio Perini sees potential in using more digital technology. It already has been using a web shop for parts, and with the pandemic, “I think we’re going to end up quadrupling our sales on the web shop.”

The company also has an artificial intelligence remote service that’s growing in use — essentially, it uses a special set of glasses that the customer wears onsite, allowing the technician and electrical engineer to assess and troubleshoot problems remotely.

Deloitte released a report in May that examined the potential of building aftermarket services in manufacturing following the COVID-19 pandemic, finding that demand for new industrial equipment had declined as companies reduced capital spending, but aftermarket products and services could produce more high-margin, stable revenues and boost manufacturer performance.

Additionally, the report found that companies keeping a focus on digital technologies will see greater sustainability in aftermarket services, particularly with a greater need for remote assistance capabilities.

More companies are moving to the digital side anyway, and the pandemic may have helped to accelerate what needed to happen, Wilson says.

“It’s really hard to do it when you’re still comfortable and there’s no reason to push yourself out of the comfort zone,” she says.